Is Purple Finance overvalued or undervalued?

As of 17 October 2025, the valuation grade for Purple Finance has moved from risky to very expensive, indicating a significant shift in its market perception. The company is currently overvalued, with a PE Ratio of -11.87, an EV to EBITDA of -18.51, and a Price to Book Value of 2.49. These ratios suggest that the company is struggling financially, as indicated by its negative earnings and returns on capital, with a ROCE of -11.03% and ROE of -20.95%.
In comparison to its peers, Purple Finance's valuation metrics stand out unfavorably. For instance, Bajaj Finance has a PE Ratio of 38.21, while Life Insurance boasts a PE of 11.49, both reflecting a healthier financial position. Additionally, the company's recent stock performance has been poor, with a year-to-date return of -47.72%, contrasting sharply with the Sensex's positive return of 7.44% during the same period. This further reinforces the notion that Purple Finance is overvalued in the current market landscape.